KOCHI, June 29: The Kerala high court will hear on Monday a petition filed by Hindustan Lever Ltd (HLL) against the Kerala Vyapara Vyavasaya Ekopana Samiti (KVVES) and the All-Kerala Distributors' Association (AKDA) for preventing it from distributing its products in the State.

The proceedings in the High Court open up a new chapter in the month-long row over a demand by traders for higher commission for selling HLL products. Earlier, the High Court had ordered the State police to provide protection to HLL's representatives and distributors in view of a boycott of the company's products by KVVES and AKDA.

The boycott of Lux and Lifebuoy brands of HLL soaps which began on June 1 acquired a tinge of violence on June 21 - in Kozhikode - with members of the KVVES preventing the unloading of HLL products on some of its distributors' premises. The following week saw the Kozhikode incident being repeated and at Muvattupuzha, 25 km from here. Since then KVVES has prevented the distribution of HLL products throughout the State. The traders decided to boycott the entire range of HLL products after the Kozhikode incident which led to the arrest of some KVVES office-bearers.

Both HLL and KVVES have stuck to their guns. A spokesperson for HLL told The Financial Express, ``There is no question of bowing to the traders' demand.'' He said HLL was offering the traders comparable commission for their services. "We have also acknowledged their role as partners in the business."

HLL had appealed to the traders, prior to the incidents at Kozhikode and Kochi, to come to terms with the rates of commission. HLL justified the current rates of commission on grounds that HLL products moved fast. Besides, the advertisement support and the quality of the products ensured that the traders did not lose out.

In a bid to defeat the boycott, HLL is now using the network of SupplyCo and Maveli fair price shops, run by the State Civil Supplies Department, to sell their products. Advertisements are being run in all leading dailies in the State announcing the availability of HLL products at these outlets. However, KVVES sources say HLL will not be able to near the turnover it has achieved through the retailers. HLL has a turnover of around Rs 350 crore in Kerala from its wide range of consumer products. The current boycott of its products will affect its performance for the first quarter of 1997-98.

KVVES Ernakulam district president CJ Joseph says traders are capable of forcing HLL to pay higher commission. KVVES is determined to force HLL to pay higher commission to the traders, he adds.Meanwhile, an HLL statement said the company would explore all possibilities and opportunities to sustain supplies of its products in Kerala. It was because of the State Government's concern and firm resolve to ensure that people in the state are not denied essential commodities of daily use, that the company plans to try all possibilities available, the statement adds.

The company will also ensure that it feeds the government-run outlets, especially in small towns and rural areas, so that the consumers in Kerala continue to get its products.

Contrary to the impression being created by certain sections, the company has never increased the prices of its products indiscriminately, the statement says.

HLL's price increases over the last eight years have been significantly lower than the inflation in input costs, which has at times been as high as 25 per cent, the release adds.

HLL's margins are uniform across the country and traders even in acknowledged high-cost locations like Mumbai and Delhi find HLL's margin and totality of its package attractive and profitable.

The company reiterates that ,in the light of these facts, the argument that the margins are inadequate is untenable.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.